Du Q2 profit rises 57pc to $88.6m

Dubai, July 30, 2012

Du, the UAE's second biggest telecommunications operator, reported a 57 percent rise in second-quarter profit on Monday, which was at the low end of analysts' estimates.

The firm, which ended rival Etisalat's domestic monopoly in 2007, made a net profit of 325.5 million dirhams ($88.6 million) in the three months to June 30, up from 207.2 million dirhams in the year-earlier period.

Analysts polled by Reuters had on average forecast du would make a quarterly profit of 332 million dirhams.

Quarterly revenue was 2.45 billion dirhams, up 12.9 percent from a year earlier. Of this, 1.9 billion dirhams came from mobile customers.

Du had 5.73 million mobile subscribers as of June 30, up 3.5 percent from March 31 and 20 percent higher than a year ago. But its share of the UAE's mobile subscribers fell slightly to 46.5 percent, indicating Etisalat is fighting back against its smaller rival after du rapidly won market share in the first few years following its launch.

The UAE mobile market is saturated, with mobile penetration at 149 percent or almost 1.5 subscriptions per person. Rising use of Internet-based phone services has hurt operators' lucrative international calls business and weighed on call margins, spurring operators to diversify revenue.

Du's fixed phone, broadband and television units recorded year-on-year subscriber growth of between 13.2 and 19 percent, but subscriber numbers were almost flat compared to the first quarter, with television subscribers down 0.4 percent.

Total overheads were 733 million dirhams in the second quarter, which equates to 29.9 percent of revenue, down from 35.2 percent in the corresponding period of 2011.

Du in April said it may bid for a virtual operator licence in Saudi Arabia in what would be its first foreign foray. - Reuters